FedPro Success Stories

Agreement On Basis Customer

GSA Schedule contracts are negotiated based on the non-federal class of customer that receives the best overall discounts and terms from the offerer. Some time ago, many GSA contracting officers were requiring that GSA be given discounts equal to or better than dealers discounts. After meetings with FedPro and some of its clients, other contractors and some advocate groups, GSA officials created a policy that, along with recognizing end user pricing as the appropriate basis for award, limited the basis to something "other than the offerer's dealer pricing".

Securing Credits for Dealer Functions

The above change was one of two necessary steps. Excluding the offeror's dealer pricing did not exclude "dealer pricing minus the value of dealer functions", which quickly became a widely-used basis. "Value of functions" is a marketing-based concept, so cost accounting terms do not apply. The percentage of the commercial price that covers operator training, for example, would apply. Since the adoption of this policy, FedPro has researched, analyzed and reported values of dealer functions and successfully negotiated appropriate allowances for all of its clients who market through dealers.

Prep for Contractor Assistance Visits

GSA is no longer funded by taxpayers, but now relies on revenues like the Industrial Funding Fee paid by every GSA Schedule contractor. Given that change, a staff of Industrial Operations Analysts makes regularly scheduled Contractor Assistance Visits to provide useful information about how to maximize Schedule contract sales and to be sure that the contractor is properly tracking and reporting all of its Schedule contract sales. FedPro clients tell us that our support, including organizing contract files into a custom, tab-indexed binder helped them to achieve the "Exceptional" rating on the 27-point Administrative Report Card.

Effects of Contractor Assistance Visits

Beyond the help they provide, Contractor Assistance Visits result in instructions regarding specific procedures used by the contractor. In one such instance, the Industrial Operations Analyst instructed a large store, catalog, internet retailer and FedPro client, to ensure counting of all GSA sales, to, among other things, ask all store and phone customers if they are eligible to buy on GSA Schedule and to count all sales made to any entity listed in the three appendices of GSA Order ADM 4800.2F, including non-profits, non-federal or international organizations. FedPro wrote a counter-proposal that enabled this client work out a satisfactory resolution. From this experience, FedPro now includes specific statements of the methods of how its clients will identify Schedule users and how the status of orders will be determined.

Proper Description of Customer Types

It is well established that offerors must disclose pricing and terms for all types of customers. Having price lists that cover each type can also be important. For example, having published rental rates only for large accounts made it hard for a FedPro client to negotiate similar rental rates for GSA customers, even though the costs of serving large corporations and GSA customers are about the same. Proper depiction of the higher rates paid by smaller businesses allowed for GSA prices much closer to those paid by large corporations.

Dealing with Classification

Even with greater flexibility in recent times, GSA Schedule classifications are still rigid boxes that try to describe an ever-changing world.

 

Particularly for services, this can make it hard to determine which Schedule or Schedules present the best opportunity. For that situation, FedPro charts the options compared with the client's capabilities and helps the client set priorities for securing contracts.

 

For products, FedPro has helped clients in several ways, including:

 

- For a manufacturer of cases, we got the field narrowed from ten or twenty to just one classification by convincing the GSA commodity center in New York to create a Special Item Number for case, regardless of the intended contents.

 

- For manufacturers of items that cross the boundaries between information technology and other categories, FedPro has negotiated placement in one category or the other and, in a few instances, placement of different configurations in each category.

Proving Fair and Reasonable Pricing

Each contracting officer must determine that the proposed GSA pricing is "fair and reasonable" before approving an award, extension or addition of new items. In one instance, a GSA contracting officer provided examples of lower pricing on several competitors' contracts and asked why our client, as a full-service equipment provider, could not sell at similar prices. FedPro responded successfully, showing that some competitors were mass merchandisers, others derived their main revenues from businesses such as IT services, and that none of them were either as focused on the equipment business or able to provide the same level of customer support as our client.

Myth: Getting a GSA Schedule contract is all your company must do to tap into a stream of profitable federal government business.

 

Fact: Neither GSA sales nor profits will come automatically. The good news is that, of 21,713 GSA Schedule contracts in effect during FY 2011, reported sales for 41% were greater than $100,000 and reported sales for 17% were over $1,000,000. Contractors who achieve those levels every year will tell you that federal users, buyers and other decision makers choose suppliers that they know and trust. This places success within your reach. Making GSA sales depends on the same good marketing skills as you use to reach commercial customers. Making a profit sales depends on the same negotiating skill and good management that makes your business successful in other markets. For help or more information, email GSAinfo@fedpro.com.